December 20, 2022
SBA Hot Topic Tuesday – Small Business Loan Dollar Amount Decreased 21% in 2021
Last week, the federal bank regulatory agencies released data on small business, small farm, and community development lending during 2021. The data comes from financial institutions that are required under the Community Reinvestment Act to collect and report data regarding small business, small farm, and community development lending. The following data is not inclusive of all banks and nonbank financial institutions that extend such loans.
Here are the statistics:
• Community Reinvestment Act reporters made up 75% of small business loans outstanding and about a third of small farm loans outstanding.
• In 2021, financial institutions with assets of $1.322 billion or more accounted for 99.3% of reported small business loan originations.
• Institutions with assets of $10 billion or more made up 70.1% of CRA-reported small business loans originated in 2021 by dollar amount.
• The number of loans and the number of loans originated increased by 12.6% compared to 2020.
• The dollar amount of small business loans decreased by 21%.
• For small farm loans, the number of originations increased by 26.4%, and the dollar amount decreased by 1.2% from 2020 to 2021.
• In 2021, 83.8% of small farm loan originations and 92% of small business loan originations were for amounts under $100,000
• For the dollar amount distributed, 35.5% of small business loan dollars and 31.5% of small farm loan dollars were extended through loans less than $100,000.
• 47.1% of the reported small business loan originations and 29% of the dollar amount of small business loan originations went to firms with revenues of $1 million or less.
• 59.3% of reported small farm loan originations and 67.7% of the dollar amount of small farm loan originations went to firms with revenues of $1 million or less.
• All lenders over the mandatory reporting threshold ($1.322 billion in 2021) reported over $151 billion in community development loans in 2021. This was a 10.1% decrease from the amount reported in 2020.